Question

Early on with the onset of the COVID-19 pandemic, consumers were worried about the spread of the virus and increased their demand for delivery services such as Amazon and Uber instead of shopping on their own. How did this impact the demand for delivery services?

a) Demand increased; the demand curve shifted to the right
b) Demand decreased; the demand curve shifted to the left
c) Demand was not affected
d) Demand was affected; we can't comment how.

Answer 1

a) Demand increased; the demand curve shifted to the right.

The increase in consumers' demand for delivery services due to the fear of contracting COVID-19 resulted in a shift in the demand curve to the right. This means that at any given price, consumers demanded more delivery services than before, leading to an increase in the quantity demanded and a higher equilibrium price. This shift in demand is due to a change in consumers' preferences and behavior, which is a non-price determinant of demand. As a result, businesses such as Amazon and Uber experienced a surge in demand for their delivery services, as consumers relied on these services to avoid leaving their homes and potentially contracting the virus.